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Remember peak oil?

GoSeigen
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Remember peak oil?

#302022

Postby GoSeigen » April 20th, 2020, 6:01 pm

US Crude futures for May delivery below $6 now!

LOL


GS

Snorvey
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Re: Remember peak oil?

#302032

Postby Snorvey » April 20th, 2020, 6:49 pm

Bloomberg online are saying the current WTI price is a buck a barrel. Down 94% on the day.

Berwicklaw
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Re: Remember peak oil?

#302040

Postby Berwicklaw » April 20th, 2020, 7:20 pm

Which is less than 1p per litre. Fill your boots ! ( in the apparent absence of an alternative)

Laughton
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Re: Remember peak oil?

#302042

Postby Laughton » April 20th, 2020, 7:23 pm

And yet Shell (RDSB) shares are actually up today.

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Re: Remember peak oil?

#302054

Postby Snorvey » April 20th, 2020, 8:05 pm

Laughton wrote:And yet Shell (RDSB) shares are actually up today.


I guess the market sees a lot of the smaller, weaker competition being crushed by the low oil price and the likes of Shell being strong enough to win through.

johnhemming
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Re: Remember peak oil?

#302055

Postby johnhemming » April 20th, 2020, 8:08 pm

I think in the end for delivery tomorrow the price went negative in the USA because of a storage shortage.

GoSeigen
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Re: Remember peak oil?

#302073

Postby GoSeigen » April 20th, 2020, 9:05 pm

johnhemming wrote:I think in the end for delivery tomorrow the price went negative in the USA because of a storage shortage.


Wow, minus $40 on some contracts at the close. Amazing!

https://www.bloomberg.com/news/articles ... orage-woes

GS

1nvest
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Re: Remember peak oil?

#302097

Postby 1nvest » April 20th, 2020, 10:32 pm

Laughton wrote:And yet Shell (RDSB) shares are actually up today.

Maybe because yesterday it was being reported they were chartering a fleet of low carbon oil tankers - and today some are paying $333K/day to rent the tanks on oil tankers to store oil, or where they are paying others to collect 'free' oil.

dspp
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Re: Remember peak oil?

#302101

Postby dspp » April 20th, 2020, 10:57 pm

GoSeigen wrote:US Crude futures for May delivery below $6 now!

LOL


GS


GS,
The prediction (from some of us) was that during the peak oil plateau phase volatility would increase. And some of us indicated this would be a decadal thing. We are, imho, probably mid-way through peak oil. This is what it looks like.
Regards,
dspp

johnhemming
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Re: Remember peak oil?

#302113

Postby johnhemming » April 21st, 2020, 2:58 am

This, however, is a pandemic thing rather a symptom of the fact that there are geological limits to the production of Crude Oil.

colin
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Re: Remember peak oil?

#302125

Postby colin » April 21st, 2020, 8:18 am

johnhemming wrote:This, however, is a pandemic thing rather a symptom of the fact that there are geological limits to the production of Crude Oil.

Never let a good fact spoil the narrative.

petroleum1
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Re: Remember peak oil?

#302145

Postby petroleum1 » April 21st, 2020, 9:45 am

johnhemming wrote:This, however, is a pandemic thing rather a symptom of the fact that there are geological limits to the production of Crude Oil.


When oil is produced it cannot be replaced and new oil must be found. This why high cost shale came into existence.

bungeejumper
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Re: Remember peak oil?

#302161

Postby bungeejumper » April 21st, 2020, 10:20 am

It's dangerous territory unless you know exactly what you're doing. The majority of ordinary punters are jumping into ETCs such as Wisdomtree's CRUD that they think will allow them to simply ride the rising tide when prices rise again. But that's a disaster in waiting, because most of them have no idea about how contango works. Or the rolled-forward exposure.

https://seekingalpha.com/article/259740 ... king-error is as good a guide as any. And it also explains why my Brent ETCs (OILB) only made a 25% profit when the oil price was damn near doubling. :(

The bottom line is that the funds are constantly obliged to roll their contracts forward if they don't want to be saddled with a physical delivery of a million barrels of crude. (And who would? It will make an awful mess of the basement. :lol: ) So they end up being forced to buy the new contracts at much higher prices, and to sell their current contracts for peanuts, and the fund takes the hits, all the way.

Or something like that.....

I've been dabbling in commodities for the best part of 30 years, and done fairly well, but the more I learn, the more I discover I don't understand. I don't think I've ever encountered a sector where the inside track is so well informed as it is with oil. There is no Ben Graham moment here, I fear! Although I might still be tempted by a couple of oil producers, who are at least partially insulated from the weird logic of the ETC world. The divis from RDS have done me proud over the years, but I sold at 2,300p and I'm still looking for a time to be back in.

BJ

johnhemming
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Re: Remember peak oil?

#302186

Postby johnhemming » April 21st, 2020, 11:39 am

The frac spread count is already below the trough from 2016.
https://twitter.com/PrimaryVision/statu ... 6051345413

petroleum1
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Re: Remember peak oil?

#302259

Postby petroleum1 » April 21st, 2020, 3:35 pm

I was going to buy some oil stocks but it was reported that BRENT will be dragged down by WTI
fall so I am postponing this for the time being.

GoSeigen
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Re: Remember peak oil?

#302318

Postby GoSeigen » April 21st, 2020, 7:36 pm

dspp wrote:
GS,
The prediction (from some of us) was that during the peak oil plateau phase volatility would increase. And some of us indicated this would be a decadal thing. We are, imho, probably mid-way through peak oil. This is what it looks like.
Regards,
dspp


That's pretty funny dspp! I think chutzpah is the word.

GS

johnhemming
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Re: Remember peak oil?

#302361

Postby johnhemming » April 22nd, 2020, 3:09 am

That's reasonable, but there is a timescale question.

dspp
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Re: Remember peak oil?

#302406

Postby dspp » April 22nd, 2020, 9:47 am

GoSeigen wrote:
dspp wrote:
GS,
The prediction (from some of us) was that during the peak oil plateau phase volatility would increase. And some of us indicated this would be a decadal thing. We are, imho, probably mid-way through peak oil. This is what it looks like.
Regards,
dspp


That's pretty funny dspp! I think chutzpah is the word.

GS


GS,

It is possible :)

More seriously renewables are taking a slice out of the demand, year by year. There is a reason why ROPEC+USA are having a bust up internally about who gets to ship their oil reserves over the next few decades before they become devalued. It is hard to remain king for life, for a long life, if the contents of your treasury are stolen or devalued.

These things are connected. The deep drivers are long term, overlaid of course by the short term noise.

Regards, dspp

johnhemming
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Re: Remember peak oil?

#302433

Postby johnhemming » April 22nd, 2020, 10:56 am

It could be faster. It depends really on to what extent people start flying again.

johnhemming
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Re: Remember peak oil?

#302447

Postby johnhemming » April 22nd, 2020, 11:25 am

Bio jet fuel takes a lot of fertiliser to grow which comes substantially from fossil fuels.


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